Benson Hill(US:BHIL)2021-11-15 16:26Financial Data and Key Metrics Changes - Adjusted revenues in Q3 increased by 35% year-over-year, with the ingredients segment seeing an 80% growth year-over-year when excluding sales from the Barley Operations sold last year [14][31] - Consolidated gross profit for the quarter was $409,000, a decline of $898,000 compared to the prior year, but flat when adjusted for gross profit from the sale of the non-core barley business [32] - Operating cash usage for the nine months ended September 30 was $73.6 million, with a cash balance of $257 million at the end of the quarter [30] Business Line Data and Key Metrics Changes - The ingredients segment experienced a 34% year-over-year revenue growth on a U.S. GAAP basis, driven by proprietary soybean product sales and higher volumes and average selling prices for yellow pea [31] - Fresh segment revenues declined by 19% compared to the third quarter last year due to higher than expected yields impacting average selling prices and volumes [31] Market Data and Key Metrics Changes - The market for fresh produce continues to be impacted by higher yields, negatively affecting average selling prices and volumes, with these conditions expected to persist into 2022 [33] - Supply chain challenges in the U.S. have resulted in higher costs for fuel, storage, and freight, particularly impacting the fresh produce segment [33] Company Strategy and Development Direction - The company is focused on leveraging technology and innovation to create a food innovation platform that combines data, genomics, and AI to enhance product development timelines and costs [11][12] - The company aims to address consumer demand for sustainable and affordable food options, emphasizing the importance of better seed development and a vertically integrated business model [10][11] - The company has opened a Crop Accelerator facility to double plant growth cycles per year and enhance seed development efficiency [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or exceeding the $127 million revenue guidance for the year, despite current operating challenges [15] - The company is optimistic about the market potential for its products and is actively engaging with farmers and customers to expand its partnerships and product offerings [16][21] Other Important Information - The company completed a merger with Star Peak Corp II, which provided a significant cash infusion to support its business plans [26][28] - SG&A expenses for the quarter were $28 million, including costs related to the merger and public company readiness, with adjusted SG&A costs at $14.5 million [34] Q&A Session Summary Question: What is Benson Hill's plan if the demand for ingredients from competitors like Beyond Meat and Impossible Foods flattens? - Management highlighted the significant market opportunity for plant-based proteins, estimating growth to exceed $100 billion by the end of the decade, and emphasized their role in supporting a wide variety of customers [42][43] Question: Has Benson Hill budgeted for third-party assessments of greenhouse gas emissions? - Management confirmed ongoing engagement with third-party resources to conduct lifecycle analyses of their ingredients to establish greenhouse gas emissions and water use baselines [44][45] Question: What are the plans for new product development in 2022? - The company invests over $40 million annually in R&D and plans to share more about its innovation pipeline during an Investor Day in early April [46] Question: When does the company expect to be profitable? - Management indicated that they have sufficient cash to fund operations into 2023 and are focused on capturing market share for their products [47] Question: What markets does Benson Hill consider promising outside of plant-based protein? - Management noted opportunities in the broader "food is health" movement and is using CropOS to research and develop food innovations in the fresh produce market [48]